The Non-Stimulus

Big Government: Getting sold a stimulus bill of goods was bad enough. Now we learn that price tag was $43 billion bigger than advertised, and that billions of stimulus bucks went to tax cheats.

According to a Congressional Budget Office report this week, the stimulus actually cost taxpayers $830 billion, not the $787 billion promised in early 2009, a 5.5% increase. And this figure has been steadily rising. The CBO put the stimulus's cost at $814 billion last November, and $821 billion in February.

But who cares? After all, the stimulus "saved or created" as many as 4.6 million jobs and boosted GDP by as much as 3%. And, given the Keynesian economic models the CBO employs — which simply assume more federal spending boosts economic growth and leads to more jobs — the bigger the stimulus the better.

Of course, the 13.7 million people out of work now might disagree with these models. And even the CBO admits that "a key disadvantage of the model-based approach is the considerable uncertainty about many of the economic relationships that are important in the modeling." Translation: We're pretty much guessing.

As we've pointed out in this space before, other economists have used actual empirical data and found zero job creation, or net job losses, from the stimulus.

In any case, while things could have been worse, as the CBO suggests, they most definitely could have been better. It's no coincidence that, after the 1981-82 recession, President Reagan's policies of tax cuts, deregulation and spending restraint produced a recovery that positively smoked, while Obama's opposite approach of massive spending, massive new regulation and the promise of massive tax hikes to come has produced one of the worst recoveries ever.

To make matters worse, a separate Government Accountability Office report this week found that $24 billion in stimulus money went to thousands of companies that collectively owe the federal government at least $757 million in unpaid taxes.

That's despite repeated pledges by the White House that it would aggressively monitor where the money went to avoid such things.

In one of his many efforts to sell the stimulus to a skeptical public, President Obama said that "at a time when everybody is tightening their belts, the last thing the American people want to see is that any of this money is being wasted."

Unfortunately, the scale of the stimulus waste just keeps growing.